The remains were found just off Brethren Point Road in a heavily-wooded area of the forest known as Dalys Waterhole.

Serial killer . . . Ivan Milat. Photo: Darren Pateman

Andrew said he and his friends had driven on that trail numerous times and it was only when they did a U-turn in the bush that they came across the remains.

He said a recent fire in the area might have uncovered the remains.

The riders immediately alerted police from Goulburn Local Area Command who attended the scene a short time later.

The discovery raises the possibility that Milat might have had an eighth victim.

A steady flow of police officers, including forensic specialists, arrived at the site this morning.

Goulburn Local Area Commander, acting Superintendent Evan Quarmby, would not be drawn on whether there were any links between the remains and the Milat murders.

He also would not say if the convicted serial killer would be spoken to as part of this investigation.

"We are not drawing any conclusions in relations to missing persons or past or current criminal investigations," he said. "We are just going to gather what we can and make judgements from that."

He said the bones were spread out over a small area that police would continue to search for a number of days.

"It is early days and far too soon for us to know exactly what's happened," acting Superintendent Quarmby said.

"Obviously there is a lot of speculation surrounding this discovery but we definitely will not be jumping to conclusions.

"There are many lines of investigation to explore," he said. "We will wait for the results of a post-mortem examination and DNA tests and hopefully they will shed some light on the identity of the deceased and a cause of death."

The head of the NSW homicide squad, Detective Superintendent Peter Cotter, said earlier that police were treating the discovery ''as human, until we know better''.

He said homicide squad detectives would speak to Goulburn detectives and forensic police today. He said that some animal remains looked like human remains.

The former roadworker is serving seven life sentences for murdering seven backpackers, aged 19 to 22, between 1989 and 1992.

Five of them were visiting Australia (three German, two British) and two were Australian travellers from Melbourne.

Speculation about more victims has continued since the murders. At least 10 other backpackers went missing about the same time in NSW and Queensland.

After the discovery of Milat's seventh victim in 1993, an extensive search of the 4100-hectare forest involving up to 1000 police officers and volunteers was conducted. No more bodies were found.

Local detectives have formed Strike Force Hixson to investigate the discovery and are being assisted by State Crime Command's Homicide Squad, police said.

Police have issued an appeal for public assistance as they continue their inquiries.

"I'd urge anyone with any information that might help us progress this investigation to contact Crime Stoppers on 1800 333 000," acting Superintendent Quarmby said.